Articles Posted inCar Dealership Complaints

In Grabinski v. Blue Springs Ford, 136 F.Supp. 565, 568 (8thCir. 1998), the Court of appeals upheld a $210,000 punitive damage award where the jury awarded $7,835 in compensatory damages. In Grabinski, the plaintiff action was based on the following misstatements of material fact: 1) The car was very nice; 2) the car was driving fine; 3) the car only needed a clean up and standard service; 4) the car was in excellent condition, had had one owner and had never been wrecked. The court determined that the jury had a reasonable basis to conclude that the dealer, defendant, should have been aware of the condition of the vehicle, which had been seriously damaged by a prior owner. Id at 569.

In Chezik Homerun v. NKC Motors, 153 F.3d. 1014 (8thCir. 1998), the Court of Appeals upheld a jury verdict for $6,900 in compensatory damages and $35,000 in punitive damages. The jury had determined that the defendant had violated the applicable Consumer Fraud Statute by misrepresenting 1) the car was a one-owner car; 2) the car had been traded in because the prior owner wanted an upgrade; 3) the car had nothing wrong except a pop can holder. The jury also found the defendant had violated the Act by concealing (representing by silence) that the car had sustained prior wreck damage.

Amy Handlin and John McKeon are sponsoring an anti-consumer bill that would change the business landscape in New Jersey.

A key provision of the new New Jersey Consumer Fraud Act would exempt out of state transactions. This means the following: if someone in New Jersey commits consumer fraud upon a non-resident (living in NY, PA or CT) there are no consequences.

The changes in the Consumer Fraud Act would exempt or limit liability against businesses that are already regulated, such as car dealerships. It would also limit liability for consumers who consummate out-of-state transactions. This arguably contradicts other legislation that has been introduced to increase liability for those committing consumer fraud.

COUNT V Unconscionability of Arbitration Clause 1. The plaintiff reasserts the previous facts as if set forth at length herein.

2. All times hereinafter, the plaintiff signed at least two separate agreements with regard to the purchase of the vehicle. The first agreement, which was signed by the plaintiff, was a buyer’s order containing the arbitration clause. The second and final agreement signed by the plaintiff was considered a retail installment sales contract and contained the interest rate of the subject transaction. The retail installment sales contract specifically says that this is the entire agreement between us. There is no such arbitration clause in the retail installment sales contract and the buyer’s order was superseded by the retail installment sales contract, including all of the relevant terms. Thus, the terms and conditions contained in the buyer’s order constitutes parole evidence and is not admissible as to the terms of the transaction.

3. In addition, the application of the American Arbitration Association rules and procedures would void the plaintiff from effectively litigating her claim. Specifically, the plaintiff acquired a vehicle for in excess of $46,000. New Jersey Law permits punitive damages equal to five times compensatory damages or $350,000, whichever is greater. Based on the defendants’ conduct and the purchase price of the vehicle, the plaintiff would be seeking the maximum amount allowable under New Jersey Law, which should be up to $350,000. In this specific case, the plaintiff makes very strong allegations of fraud and consumer fraud against the selling dealership as well as the manufacturer, permitting the plaintiff to recover three times the purchase price of the vehicle, which would be in excess of $135,000. The plaintiff would also be entitled to costs of the suit plus punitive damages. The costs associated with filing an arbitration which seeks in excess of $200,000 to $300,000 in damages would be in excess of $15,000 to $20,000, based on the American Arbitration Association commercial rules.

Many times, either before or even after litigation has started, there is a need to send a demand letter to either the other lawyer or the dealership. This is an example of a letter to a dealership that was written to try to resolve a case.